(ExecDigital News)
“I believe that Latin America, home to half-a-billion people south of the U.S.-Mexico border, has the potential to be the next hotbed of trade and economic growth,” UPS Chairman and CEO Mike Eskew told participants at the U.S. Commerce Department’s inaugural Americas Competitiveness Forum.
“But it is clear the Americas are at a crossroads,” Eskew continued. “Although we’re neighbors, our border and customs policies make it sometimes seem like we’re enemies. We have so many complicated customs and security requirements in place that it’s often easier to import goods from Europe or Asia ... The choices are to adapt, or become irrelevant.”
The trade issues facing the region are particularly nettlesome, the CEO added, because they are impeding what should be clear “built-in advantages.”
“The first is geographical proximity,” Eskew said. “In an era of just-in-time supply chains, proximity is everything. Latin American markets can be accessed by land and sea. Another key advantage ... is the ability to take advantage of several free-trade agreements. While we still face the challenge of how best to knit them together, these agreements really matter.”
The chief executive noted the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico already has created the second-biggest trading bloc in the world behind the European Union “and accounts for far more trade than the U.S. conducts with China.”
“And between 1997 and 2020, Latin America’s real Gross Domestic Product is expected to grow 4.4 percent annually. That’s faster economic growth than Asia at 3.6 percent and much faster than the 2.8 percent global average.”
Such growth is not guaranteed, however, and the nations of Latin America have got to start addressing their problems now, Eskew said.
The CEO used the automotive industry to illustrate just one of the problems with the current customs process.
“Did you know that the average North American-produced vehicle crosses the border more than seven times during production?” he asked. “During the journey, each vehicle faces a staggering 28,200 customs transactions. By comparison, cars imported from Europe or Asia to North America involve a single customs transaction. If we delay cross-border shipments by just a day, the Americas lose their proximity advantage over Asia.”
Private companies, meantime, should respond by using technology to improve their own product supply chains. There are huge gains in efficiency to be had by removing middlemen and unnecessary warehousing and creating information systems that keep track of every movement, Eskew asserted.
• Develop a single, streamlined customs clearance system.
• Identify “trusted shippers” and let them get in the “fast lane” for customs processing.
• Raise the minimum dollar value at which imported goods must receive customs clearance and separate the release of shipments from the collection of duties and fees.
• Increase spending on transportation infrastructure, particularly the road and rail networks. Latin America is spending less than 2 percent of GDP on infrastructure compared to 3-to-6 percent in China and South Korea.
• Improve the communications infrastructure, both wired and wireless.
“Global commerce is like a river,” the CEO concluded. “It tends to flow down the paths of least resistance. While Asia and other regions work to make their countries friendly to trade, we cannot be comfortable with the status quo.”
Related: Harper to Visit Caribbean for Meetings with CARICOM
July 2, 2007
Dangerous Fake Goods Crossing Border
(Toronto Star)
Agency has no power to seize items but fears over Chinese imports could change that
RCMP Superintendent Ken Hansen gave his boss a pack of batteries last summer as an example of Chinese counterfeit merchandise arriving at Canadian ports. They made quite an impression months later – when they exploded.
The senior RCMP official thought a gun had gone off in the office. Luckily for Hansen, the batteries blew up in his superior’s desk drawer.
“It was quite an explosion,” Hansen said. “If you were holding it in your hand you probably would have lost some fingers.”
The batteries, disguised as a Western brand, lacked a near-invisible vent that allows pressure to escape. In 2006, when RCMP officials seized more than four tons of fake, dangerous batteries, Health Canada issued a warning: since 2000, they have received 86 complaints of overheating or leaky batteries and eight children suffered burns.
The Canada Border Services Agency has, knowingly, let container loads of counterfeit batteries into the country, along with myriad other phony goods, some of which are dangerous. They have neither the budget nor the mandate to stop the deluge of fake products. They search less than three per cent of incoming shipments.
Hansen, who is a co-chair on Interpol’s intellectual property crime action group, said the RCMP can investigate only 25 per cent of counterfeit shipments arriving in Toronto that are flagged by the border agency, and only then if they are major safety risks or are linked to international crime.
But growing concern about Chinese imports, especially after the U.S. pet food recall, has led to two committees in the House of Commons that have recently reported on the cost – and risk – of dangerous counterfeits.
On June 21, Health Canada ordered border agents to stop incoming Chinese toothpaste after counterfeit Colgate tubes, possibly containing a poison used in antifreeze, were found in Guelph and Halifax.
Around two thirds of counterfeits that arrive in Canada are from China.
“You used to see T-shirts, purses,” Hansen said, noting that in mid-June, in Quebec, the RCMP seized a shipment of fake chainsaws from China. “Ten years ago you wouldn’t have seen this.”
There have been exploding circuit breakers in Ontario and Quebec hospitals, electrical cords that catch fire after 10 minutes, and fake pharmaceuticals – some of which have been mixed into the supply chain of regular pharmacies, though most get sold on the Internet. Counterfeiters will often combine shipments of fakes: officials once found Louis Vuitton bags stuffed with counterfeit medicine.
The U.S. Federal Aviation Authority once estimated that 2 per cent of parts installed annually on American airplanes are fake.
It is not illegal under Canada’s Customs Act to import counterfeit goods. Border officials do not actively search for them, and will only alert RCMP officials if counterfeits are found during searches for other illegal imports.
Carol Osmond, a lawyer and vice-chair of the Canadian Anti-Counterfeiting Network, said Canada’s border agency lacks a clear legislative mandate to seize counterfeit goods. “There’s a recognition even within CBSA that there needs to be change,” Osmond said.
Unless Health Canada or the RCMP say counterfeits pose major risks to Canadians, border officials usually let them through.
On the percentage of fake goods coming into Canada that are actually seized, Lorne Lipkus, a lawyer whose firm is devoted to anti-counterfeit enforcement, said, “I’m really comfortable saying it’s less than 1 per cent.”
Lipkus said Canada’s anti-counterfeit measures are more lax than those of many developing countries. He has represented Canada at international conventions on anti-counterfeiting measures and said: “We felt like a third world country. It is very embarrassing.”
Kenya, Vietnam and Serbia – even China – have a process Canada lacks, where corporations can register trademarks with border agencies, allowing customs agents to seize and destroy counterfeit shipments.
A parliamentary committee reported on June 20 to the House of Commons on how Canada could improve its dismal performance at the border. Among the committee’s recommendations: government should make the importation and distribution of counterfeits a criminal offence; parliament should provide the CBSA with a clear mandate to target counterfeits; and that Health Canada needs more resources to investigate unsafe food and drug imports.
James Rajotte, the Conservative MP who chaired the committee, said it’s not just about intellectual property rights, but about health and safety. “CBSA is doing the best job that they can, but they need to have the mandate to target counterfeits,” Rajotte told the Star.
Stockwell Day, minister of public safety, told the Star by email that the government “will review the committee’s recommendations very carefully and report back to Parliament in a timely manner.”
Not all counterfeits arriving in Canada are from China: drugs arrive from India, vodka from Russia, and watches from Italy. Counterfeiters also bounce containers through third-party countries to mislead customs officials in destination countries.
“They’re not called organized for nothing,” Hansen said.
In May, a report estimated that knock-offs cost the domestic economy $20 billion to $30 billion.
Agency has no power to seize items but fears over Chinese imports could change that
RCMP Superintendent Ken Hansen gave his boss a pack of batteries last summer as an example of Chinese counterfeit merchandise arriving at Canadian ports. They made quite an impression months later – when they exploded.
The senior RCMP official thought a gun had gone off in the office. Luckily for Hansen, the batteries blew up in his superior’s desk drawer.
“It was quite an explosion,” Hansen said. “If you were holding it in your hand you probably would have lost some fingers.”
The batteries, disguised as a Western brand, lacked a near-invisible vent that allows pressure to escape. In 2006, when RCMP officials seized more than four tons of fake, dangerous batteries, Health Canada issued a warning: since 2000, they have received 86 complaints of overheating or leaky batteries and eight children suffered burns.
The Canada Border Services Agency has, knowingly, let container loads of counterfeit batteries into the country, along with myriad other phony goods, some of which are dangerous. They have neither the budget nor the mandate to stop the deluge of fake products. They search less than three per cent of incoming shipments.
Hansen, who is a co-chair on Interpol’s intellectual property crime action group, said the RCMP can investigate only 25 per cent of counterfeit shipments arriving in Toronto that are flagged by the border agency, and only then if they are major safety risks or are linked to international crime.
But growing concern about Chinese imports, especially after the U.S. pet food recall, has led to two committees in the House of Commons that have recently reported on the cost – and risk – of dangerous counterfeits.
On June 21, Health Canada ordered border agents to stop incoming Chinese toothpaste after counterfeit Colgate tubes, possibly containing a poison used in antifreeze, were found in Guelph and Halifax.
Around two thirds of counterfeits that arrive in Canada are from China.
“You used to see T-shirts, purses,” Hansen said, noting that in mid-June, in Quebec, the RCMP seized a shipment of fake chainsaws from China. “Ten years ago you wouldn’t have seen this.”
There have been exploding circuit breakers in Ontario and Quebec hospitals, electrical cords that catch fire after 10 minutes, and fake pharmaceuticals – some of which have been mixed into the supply chain of regular pharmacies, though most get sold on the Internet. Counterfeiters will often combine shipments of fakes: officials once found Louis Vuitton bags stuffed with counterfeit medicine.
The U.S. Federal Aviation Authority once estimated that 2 per cent of parts installed annually on American airplanes are fake.
It is not illegal under Canada’s Customs Act to import counterfeit goods. Border officials do not actively search for them, and will only alert RCMP officials if counterfeits are found during searches for other illegal imports.
Carol Osmond, a lawyer and vice-chair of the Canadian Anti-Counterfeiting Network, said Canada’s border agency lacks a clear legislative mandate to seize counterfeit goods. “There’s a recognition even within CBSA that there needs to be change,” Osmond said.
Unless Health Canada or the RCMP say counterfeits pose major risks to Canadians, border officials usually let them through.
On the percentage of fake goods coming into Canada that are actually seized, Lorne Lipkus, a lawyer whose firm is devoted to anti-counterfeit enforcement, said, “I’m really comfortable saying it’s less than 1 per cent.”
Lipkus said Canada’s anti-counterfeit measures are more lax than those of many developing countries. He has represented Canada at international conventions on anti-counterfeiting measures and said: “We felt like a third world country. It is very embarrassing.”
Kenya, Vietnam and Serbia – even China – have a process Canada lacks, where corporations can register trademarks with border agencies, allowing customs agents to seize and destroy counterfeit shipments.
A parliamentary committee reported on June 20 to the House of Commons on how Canada could improve its dismal performance at the border. Among the committee’s recommendations: government should make the importation and distribution of counterfeits a criminal offence; parliament should provide the CBSA with a clear mandate to target counterfeits; and that Health Canada needs more resources to investigate unsafe food and drug imports.
James Rajotte, the Conservative MP who chaired the committee, said it’s not just about intellectual property rights, but about health and safety. “CBSA is doing the best job that they can, but they need to have the mandate to target counterfeits,” Rajotte told the Star.
Stockwell Day, minister of public safety, told the Star by email that the government “will review the committee’s recommendations very carefully and report back to Parliament in a timely manner.”
Not all counterfeits arriving in Canada are from China: drugs arrive from India, vodka from Russia, and watches from Italy. Counterfeiters also bounce containers through third-party countries to mislead customs officials in destination countries.
“They’re not called organized for nothing,” Hansen said.
In May, a report estimated that knock-offs cost the domestic economy $20 billion to $30 billion.
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